retirement

How the Medicare Part D Coverage Gap Will Affect You in 2017

The cost of prescription drugs will begin to drop for beneficiaries.

Does the Medicare Part D doughnut hole continue to close next year? What is the threshold for 2017?

Yes. The gap in coverage--known as the doughnut hole--that Medicare beneficiaries reach after incurring a specified total cost for prescription drugs in a given year will continue to shrink gradually each year until it levels off in 2020.

In 2017, after you pay a deductible of up to $400, you'll be responsible only for co-payments until your total drug costs reach $3,700 (including your share and the insurer's share of the costs). At that point, the doughnut hole kicks in, and you'll have to pay 40% of the cost of brand-name drugs (50% is a discount paid for by the drug company and 10% is covered by the plan), and 51% of the cost of generic drugs. Once your out-of-pocket costs reach $4,950 (including the brand-name manufacturer's 50% discount), you're out of the doughnut hole and you'll pay no more than 5% of the cost of each drug.

If you're approaching the doughnut hole for 2016 ($3,310 in total costs for covered drugs) and you're taking an expensive brand-name drug, ask your doctor whether you can switch to a generic medication or therapeutic alternative that has a similar benefit but costs less. For more information about shopping for prescription drugs, see 10 Ways to Spend Less on Prescription Drugs.

Starting on October 1, you'll be able to find out more about the Medicare Part D plans available in your area for 2017 at the Medicare Plan Finder. This tool compares the total out-of-pocket costs--premiums plus cost-sharing--for your specific drugs and dosages under each plan. It also shows when in the year you’re likely to hit the doughnut hole. Open enrollment runs from October 15 to December 7 for 2017 plans.

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